Bitcoin lost its gains in recent months in May and this Tuesday its price fell below 30,000 dollars, as part of a market trend away from risky assets due to the uncertainty of the war in Ukraine.
Source: AFP
Bitcoin, which is the world’s leading cryptocurrency based on its market value, depreciated to $29,764 on Tuesday, falling to a level not seen since July 2021.
This level implies a loss of 57% of its value compared to the record reached by prices in November 2021.
This fall implies that most of the funds and people who invested in bitcoin in recent months are at a loss.
The other cryptocurrencies were also not immune to the trend and the market as a whole was valued at about $1.5 trillion compared to a level of $3 trillion invested at the height of this sector’s heyday, according to data from Coingecko, which registers more than 13,000 cryptocurrencies.
The decline in the sector is linked to investors’ caution due to fears related to the war in Ukraine, the confinement in China and the adoption of a restrictive monetary policy in the United States.
This trend also affects the stocks of technology companies, whose performance has benefited from expansionary monetary policies during the pandemic.
“The correlation of bitcoin with the Nasdaq”, the American stock market index of technology “is at its maximum”, highlighted the specialized blockchain analysts of the Kaiko portal.
Given the volatility of crypto assets, it is difficult to project what the evolution of bitcoin will be.
In 2021, bitcoin temporarily fell below the $30,000 mark in June and July, before picking up steam again to hit its all-time high in November at $69,000.
– El Salvador remains confident –
An indication of the importance of this sector was that in recent years two countries, El Salvador and the Central African Republic, adopted this currency as their official currency, despite harsh criticism from international financial organizations.
The president of El Salvador, Nayib Bukele, announced that the country took advantage of the decline to buy more cryptocurrencies, adding 500 units to its fund.
On Tuesday, the president celebrated the rise of 2.3% recorded by this asset around 09:25 GMT.
Since its creation in 2009, cryptocurrency has developed against a background of ultra-low interest rates.
Now, the US issuer has warned of future increases in the guide rate to curb inflation.
“There may be temporary rallies, but as long as the yield on government bonds and the dollar continues to rise” due to the Fed’s determination, “even stronger falls are the main risk” for cryptocurrencies, warned Fawad Razaqzada, an analyst of City Index.
